What's a Budget and Why Does It Matter for You Right Now?

Author: Erin Gullage, Financial Coordinator 

Spending money sometimes feels good, but sometimes it feels scary too. How do you keep up with your expenses? Buying new things can be exciting, but how do you save for yourself and your family? How do we save money when our incomes don't match our expenses? Learning a few simple tips about budgeting can empower you and your relationship with money. YOU are in control, not the credit card companies or bill collectors. Learning to budget your finances can help you spend less and save more.

So, what is a budget? A budget is a plan you write down to decide how you will spend your money each month. It helps you make sure you will have enough money every month. Without it, you might run out of money before your next paycheck. If you begin to stray from your budget it’s usually because of spending too much money. But if you have a budget that tells you exactly how much you’re supposed to spend, why is it so easy to spend too much? There are a number of reasons we overspend, so when you understand what causes overspending, you can help put a stop to it and keep your budget on track.

The first thing you need to do is figure out how you are spending your money. Think about how you spend money, besides paying your bills. For example, do you buy a cup of coffee every day? Do you go out to dinner with friends every Friday night or go to the movies once a week? After a month, these could add up to expenses you might want to write down in your budget. 

Get all of your records together from the past year, pay stubs, loans, ATM and credit card withdrawal slips, canceled checks and itemized credit-card statements. If you've paid cash for items and don't have receipts try keeping track for a few weeks to see what you're spending. I recommend using an online budget calculator such as this budget calculator one to plug in what you're spending each month. Once you have figured out your monthly expenses you'll understand where it's going and how to manage spending.

You can use the budget you come up with every month. At the beginning of the month, make a plan for how you will spend your money. Write down what you think you will earn and spend. Try to write down what you spend each day and at the end of the month check if you spent what you planned. Use that information to help you plan for next month’s budget.

Keeping a budget helps you plan for the future, avoid debt, and enlighten your attitude about money. Take out the mystery and the fear; take control instead!

Other helpful sites: 

https://www.mint.com/

http://www.youcandealwithit.com/borrowers/calculators-and-resources/calculators/budget-calculator.shtml

http://mappingyourfuture.org/money/budgetcalculator.cfm

https://www.lendingtree.com/student-loans-index